California Attorney General Rob Bonta has publicly rejected a threat by Paramount Skydance Chief Executive Officer David Ellison to move the company out of California. Bonta described the proposal as an attempt to blackmail state officials into permitting an illegal media merger.
On Tuesday, trade publication Variety reported that Ellison warned he would relocate Paramount's headquarters and operations outside California unless state negotiators settle the lawsuit blocking Paramount's acquisition of Warner Bros. Discovery by October 1. Bonta responded on his X account, stating that the state would not yield to pressure tactics.
State Response to Relocation Threat
Bonta, the Democrat leading the state lawsuit, wrote on X that Paramount had agreed within weeks to pause the merger until a court decision or until June 2027. He stated that the company had requested a November trial date and was now returning with another attempt to blackmail the state into permitting an illegal deal.
The attorney general said Paramount has lost its way as it continues to lose in court. He added that the company tried a similar tactic on the eve of the state's lawsuit in July, emphasizing that the strategy failed then and would fail again.
Judge Araceli Martínez-Olguín has set the antitrust trial to begin on March 2, 2027. The proceeding will determine whether the massive deal, valued at $111 billion, violates free market competition.
Trial Schedule and Financial Penalties
The oral hearing is scheduled to run for 12 business days, concluding on March 19, 2027. That schedule falls far short of Paramount's formal request to start the trial in November to shorten the timeline.
Litigating prosecutors from 12 states and the Writers Guild of America (WGA), who strongly oppose the merger, had requested delaying the trial until April 2027. The resulting court schedule imposes significant financial costs on the company led by Ellison.
Under clauses in the integration agreement, Paramount will accumulate daily penalties of $7 million starting October 1. The company must pay these fees to Warner Bros. Discovery shareholders until the transaction is officially completed.
According to calculations detailed by Variety, if the trial ends as scheduled in March 2027, total management fees will reach approximately $1.2 billion. To avoid this financial drain and force a settlement with the attorney general, Ellison presented a five-year plan to progressively move most company jobs out of California.
Relocation Plans for Paramount Headquarters
Ellison's five-year plan calls for shifting the majority of Paramount's workforce outside the state. Paramount's central offices in Los Angeles would be the first location to move.
Variety reported that the company has not yet selected an exact location for its new headquarters, reflecting the improvised nature of the threat. However, Paramount is weighing destinations with more flexible tax rules, including Georgia, Texas, and Tennessee.
